The Phase-One trade deal between the United States and China goes into effect on Friday. The deal was the first major positive step forward in the trade war which has raged since the summer of 2018. However, while the two largest economies in the world are patting themselves on their respective backs, some other countries worry about what this deal means for their piece of the marketplace. One of those countries is our neighbor to the north.
The Chinese Vice-Premier has assured Ottawa that the Canadians have nothing to be concerned about. That their share of the Chinese marketplace will not be affected by the trade deal with the United States. Joe Chidley is an International Business Analyst with the Financial Post. He says despite China’s assurances, the numbers don’t add up. This is especially true in the Ag sector.
Chidley is concerned that the trade pact flies in the face of the free-market movement.
Chidley says the Phase-One agreement could come with a heavy dose of irony. Chidley says the Chinese may have to subsidize their commitments of U.S. agriculture purchases. These subsidies were one of the sticking points which led to the trade war in the first place.
Chidley says the United States and China may have started the world down the path to another global supply-chain war.
There is still much to sort out on the weeks and months ahead.